Practical Financial Planning Tips for Those Living With a Disability (Written By Ed Carter from Able Futures)

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Ed Carter, Able Futures

Financial planning is definitely a must for a secure future. This is especially true if you’re worried about ensuring your needs are met later in life, as well as taking care of the interests of those you love. When you have a disability, what might that entail? Read on as we explore this challenging concern and provide some practical solutions, brought to you by Ryan’s Voice.

Cover Daily Essentials

Before you do anything else, having a practical budget for everyday expenses is a must. Think of it as a map for plotting a course toward other financial goals, since it will help with saving and arranging to achieve them. Building a budget for your daily life involves a few basic steps. Start with how much money you actually have already on hand, figure out how much you make every month, and make a list of your ongoing expenditures. Include your debts and make a payoff plan, and think about things like retirement savings and other financial goals. 

Retirement Recommendations

When you have a disability, looking at retirement, in particular, can feel pretty complicated. If you qualify for an ABLE account, Money.com recommends looking into it. These accounts allow you to save up to $100,000 tax-free, although if you go over that amount you will lose Social Security income. Along those same lines, if you’re trying to decide on the timing of your retirement, keep in mind an early retirement would drop your Social Security benefit. 

Something else you might wish to consider in your savings opportunities is a 401(h) plan. These are tax-free savings plans for your retirement, and you can make pre-retirement withdrawals for medical expenses through a special tax code. This can still be added to your retirement plan, even if you have an existing disability, as there are no pre-existing conditions clauses.

You may also want to explore refinancing your home to help free up some cash for various expenses. A VA IRRRL (Interest Rate Reduction Refinance Loan), which some refer to as a “Streamline Loan,” can help veteran homeowners take advantage of lower interest rates. Fortunately, this requires no approval and very little paperwork on your part.

Establish an Estate Plan

A lot of people think estate planning is something only wealthy people need to do, but in fact, estate planning can help you and your loved ones through some potentially complicated circumstances. For instance, if you stand to inherit funds from a loved one, the Special Needs Alliance explains an estate plan can ensure you don’t lose Social Security benefits. With that in mind, an attorney can set up a special needs trust to help protect your interests.

Similarly, you should make plans for your ultimate demise. You should consider what guidelines you would like followed if you become incapacitated and are unable to make decisions about your health, such as a living will and healthcare proxy. You should also have an attorney draw up a will. There are plenty of templates online, but keep in mind the more complex your situation, the less these templates can reflect your wishes.   

Cover Final Arrangements

In the course of configuring your financial plans, it’s necessary to think about how loved ones will handle the expense of your end-of-life arrangements. A funeral alone can cost in the $7,000 range, and medical expenses at the end of someone’s life tend to add up as well. Getting a life insurance policy can be tough, and even if you have one, your family will probably be unable to receive those funds until after your funeral anyway. 

One way many people handle these expenses is through final expense insurance. These policies tend to be easier to get than traditional life insurance policies, and according to Lincoln Heritage, they pay out immediately upon your death. They can be used toward expenses beyond your funeral, too, such as outstanding loans and medical care costs you leave behind.  

Are you ready to plot your financial future? Be sure to cover your daily essentials, make plans for your later years, and cover the various aspects of your ultimate demise. With some arrangements made and a solid strategy, you’ll be ready, come what may.

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